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International Supply-Side Cooperation

Modelling of Paris-aligned Supply Pathways demonstrates the need to limit supply of fossil fuels to meet the objectives of the Paris Agreement. Evidence on National and Subnational Supply-Side Policies suggests there are major advantages to using supply-side policies in tandem with demand-side policies to mitigate climate change. 

Many experts believe that widespread adoption of supply-side policies could be best achieved through multilateral treaties. Supply-side policies can be pursued and recognised through Nationally Determined Contributions and other provisions of the Paris Agreement (Piggot et al, 2018). However, there are numerous deficiencies in the international climate regime with regard to supply-side cooperation. These deficiencies are discussed by van Asselt (2021), who notes the international climate, human rights and investment regimes do not provide clear or consistent guidance on supply-side policies.  

In light of these deficiencies, many experts advocate for a new multilateral international treaty for supply-side policies. Asheim et al (2019) propose a supply-side treaty to set expectations in global markets for high fossil fuel prices, redirecting investments from carbon-intensive technologies to low carbon technologies. Newell and Simms (2020) propose a fossil fuel non-proliferation treaty, drawing on the nuclear non-proliferation treaty as a model. The proposed treaty would ban the exploitation of new fossil fuel reserves, phase out fossil fuel infrastructure, and expand initiatives to assist poor countries with their energy transitions. Burke and Fishel (2020) similarly propose a coal elimination treaty. Van Asselt (2021) also considers how general principles of international environmental law support supply-side polices.  

Project proponents may point to the absence of international supply-side cooperation to argue against administrative and judicial decisions to reject new fossil fuel projects or other restrictions on fossil fuel production in a particular country. But while international supply-side cooperation may be preferable to uncoordinated and unilateral supply reductions, it does not follow that unilateral supply reductions should be rejected. All new fossil fuel projects add greenhouse gas emissions into the atmosphere and should be assessed as such: see our category page on Market Substitution

For more on (national and subnational) supply-side policies, see our category page on National and Subnational Supply-Side Policies

Principles to guide international supply-side cooperation are discussed on our category page on Equity Considerations in Fossil Fuel Phase Out.  

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